5th August, 2020
Earnings view counters Transatlantic switch
As the dismal Q2 earnings season winds down, the big positive surprises were mostly stateside despite many investors' preference for European over U.S. equity since midyear. Full-year 2020 estimates for Wall Street stocks have improved to -19% from -22% before the season - while Europe stays gloomy with 2020 estimates unchanged at -33%. Is that widening gap all down to euro/dollar's surge to 2 -year highs? Or are investors just happy to bet now on a relative out-performance next year? Either way, the gains in European stocks in dollar terms in July were all down to currency gains and a continuation of dollar weakness may be needed to justify the switch.
Chart by Ritvik Carvalho and commentary by Mike Dolan.
If you liked this, do consider subscribing. It’s free, and delivered to your inbox daily!